The Trump administration moved to cool the simmering trade war with its major trading partners on Friday, ending tariffs on metal imports from Canada and Mexico and announcing a pause on planned tariffs on cars and vehicle parts. As part of the crackdown on transhipments, the two countries also agreed to implement measures to trace the origins of steel and aluminum that enter the North American market.
The agreement says the US and Canada will establish a process for monitoring steel and aluminum trade between them.
Several prominent U.S. lawmakers had said that a vote on the U.S. -Mexico-Canada Agreement (USMCA) was impossible until after the metals tariffs - and retaliatory measures aimed largely at U.S. farmers - were lifted.
Freeland was in Washington, D.C. earlier this week where she met with U.S. Trade Representative Robert Lighthizer and others to discuss the tariffs, among other issues. Canada responded with dollar-for-dollar "countermeasures" on $16 billion worth of American imports.
WASHINGTON-The U.S. and Canada have agreed to drop their tariffs on each other's steel and aluminum and all related retaliatory tariffs, removing a major source of friction between the two countries and a key obstacle to the ratification of the new NAFTA.
US President Donald Trump imposed a 25 percent tariff on steel imports and 10 percent one on imported aluminium. "The entire USA auto and auto parts sector understands why it needs a global strategy, but the President clearly prefers 1980s style protectionism".
US stocks gained. Trade Representative Robert Lighthizer has briefed lawmakers on Capitol Hill that an announcement of a deal was close, the person said. U.S.
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The Commerce Department reached the same conclusion about Canadian and Mexican steel and aluminum imports nearly one year ago.
USA markets have wobbled wildly in the wake of trade news. So far the USA position on autos has been unclear, but it is easy now to envision that the US will demand Japan agree to limit auto shipments to the USA the same way that Mexico and Canada did, said Junichi Sugawara, senior research officer at Mizuho Research Institute. Prices for steel and aluminum-even steel and aluminum produced in the United States-spiked after Trump's tariffs went into effect, forcing downstream businesses and consumers to absorb those higher costs.
Removal of those tariffs on Canada has become a key demand for the administration to win support of the reworked trade agreement. Although the three nations agreed past year to a new trade deal to replace Nafta, the metals and retaliatory tariffs remained in place.
The U.S. demanded Canada and Mexico agree to quotas capping their exports in exchange for lifting the tariffs.
Cameron spoke to President Trump about a deal to end the tariffs around midday, according to Cameron Ahmad, Trudeau's director of communications. Tariffs on Japan and the European Union will remain in place.
Chief Cabinet Secretary Yoshihide Suga noted Thursday that when Japan and the USA agreed a year ago to open bilateral trade talks, the US pledged not to impose auto tariffs while talks were underway.